Members of the Cashew Nut Association of Cambodia (CAC) will soon benefit from a preferential interest rate of 5.5 per cent, a marked reduction from the previous 9-12 per cent.
The new rate follows a memorandum of understanding between the Small and Medium Enterprise Bank of Cambodia (SME Bank) and the CAC, aiming to enhance finance accessibility for small and medium cashew processing enterprises.
CAC president, Uon Silot, remarked on June 4 how this preferential interest rate could provide much-needed capital for the Cambodian cashew processing sector. He highlighted how capital shortage has long impeded the growth of the industry.
“Without working capital to purchase cashews, our raw cashew supply often ends up overseas. Local investors can’t compete due to inadequate capital and incomplete production lines,” he explained.
“Irregular work pushes employees to seek alternative employment, forcing us to continuously recruit and train new staff for the cashew sector,” he added.
He expressed optimism over the non-farmer preferential loans, destined for cashew stockpiling and export processing.
“A government allocation of $100 million through the SME Bank, although not substantial, can alleviate future distress,” Silot said.
Lim Aun, CEO of the SME Bank, viewed this collaboration as a strategic move towards fostering the Cambodian cashew sector’s growth.
“The signing of this memorandum of understanding will address the cashew production chain’s challenges, enhancing the cashew processing industry,” he said.
He also clarified that the bank’s support was for cashew processors and not farmers, a role fulfilled by the Agricultural and Rural Development Bank (ARDB).
Loeng Manut, manager of Chamkarler Cashew Nut Handicraft (CCN), believes the reduced interest rate might motivate cashew processors to broaden their production.
“This low-interest rate should incentivise consideration within the cashew processing industry. However, loan procedures and other conditions require careful study,” she said.
According to data from the Cashew Nut Association of Cambodia, from January to March, Cambodia generated 260,000 tonnes of raw cashew nuts. However, exports to Vietnam, amounting to 233,050 tonnes worth $320 million, fell by 12.95 per cent compared to the same period in 2022.